Berkshire's Portfolio to Focus on Stability and Diversification?

Berkshire Hathaway Inc. (BRK.B) has been rebalancing its investment portfolio to have income-generating and geographically diverse holdings. This conglomerate has sold its stake in Chinese electric vehicle maker BYD. This marks the end of a 17-year-long bond with BYD. Berkshire first invested in BYD in 2008, but had started trimming its stake since 2022. It is likely that Berkshire is lowering its exposure to China’s increasingly competitive EV sector amid geopolitical uncertainties.

This apart, Berkshire has lowered its stakes in Apple and Bank of America. While it started selling Apple shares in 2023, it started trimming its stake in Bank of America in the latter half of 2024. It appears that Berkshire is intentionally reducing concentration risk. 

On the other hand, Berkshire has been steadily increasing its stake in Japanese firms since initiating investment in July 2019. Lately, Berkshire has increased its stake in Mitsubishi Corp. and Mitsui Corp. This apart, Berkshire has stakes in three other Japanese firms — Itochu, Marubeni and Sumitomo. Corporate governance reforms have enhanced transparency and capital efficiency, making Japanese companies more attractive to foreign investors. Meanwhile, Japanese companies trade at relatively modest valuations compared to U.S. companies, making them attractive picks.

These strategic moves underscore Berkshire’s intention to ensure uninterrupted cash flow generation, which in turn can be deployed in share buybacks as well as opportunistic investments.

What About BRK.B’s Competitors?

Progressive Corporation’s PGR inorganic growth strategy focuses on building scale, technology, and distribution while reinforcing its insurance portfolio. Progressive pursues disciplined, selective deals that deliver strategic value and complement its core strengths. Through targeted acquisitions, Progressive enhances efficiency and customer reach, ensuring long-term competitiveness in a dynamic insurance landscape.

Travelers Companies’ TRV inorganic growth strategy emphasizes reinforcing core insurance strengths while expanding into complementary markets. Travelers seeks disciplined acquisitions that enhance underwriting, technology and distribution capabilities. With a focus on sustainable shareholder value, Travelers carefully evaluates opportunities that bolster its competitive edge while maintaining a conservative balance sheet.

BRK.B’s Price Performance

Shares of BRK.B have gained 9% year to date, outperforming the industry.

BRK.B’s Expensive Valuation

BRK.B trades at a price-to-book value ratio of 1.59, above the industry average of 1.54. It carries a Value Score of D.

Estimate Movement for BRK.B

The Zacks Consensus Estimate for BRK.B’s third and fourth-quarter 2025 EPS has witnessed no movement over the past 30 days. The consensus estimate for full-year 2025 and 2026 EPS has moved 2.5% and 2.3% lower, respectively, over the past 30 days.
 

The consensus estimates for BRK.B’s 2025 and 2026 revenues indicate year-over-year increases. While the consensus estimate for BRK.B’s 2025 EPS indicates a year-over-year decline, the same for 2026 suggests an increase.  

BRK.B stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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